In a crowded job market, where jobs are getting tougher and tougher to come by, some college students have turned to network marketing to make money but one Fresno City College business instructor questions whether network marketing is the the right decision for students.

According to the Federal Trade Commission, in network marketing, also known as multi-level marketing, ‘individuals sell products to the public — often by word of mouth and direct sales. Typically, distributors earn commissions, not only for their own sales, but also for sales made by the people they recruit.”

Some well-known companies that utilize a network marketing business model include Amway, Mary Kay and Vemma according to the Direct Selling Association, a trade association representing various direct selling companies.

Art Hurtado, an off-and-on student at Willow International Center, started working as a distributor for a network marketing company called Wake Up Now this past October.

He joined WUN because of what he says is their generous compensation plan.

The high compensation possible was also a major attraction for Fresno State Junior Chris Lopez.

“I heard other people’s success stories and of people making a lot of money that were the same age as me. It was kind of mind-blowing to me,” said Lopez, who joined WUN last May.

When a someone chooses to become an Independent Business Owner for the company, according to WUN’s webpage, they can begin to promote the company and be paid a commission for the customers they bring in.

According to WUN’s Compensation Plan, the more successful they are at driving up business for WUN, the more they are paid.

According to the Income Disclosure on WUN’s webpage, compensation can range from a low of $600 monthly to a high of over $100,000 monthly for their top earners.

However, in WUN’s income disclosure, less that one percent of distributors make more than $2,000 monthly. In addition, more than half are unable to earn anything at all.

Cornell University student and network marketer Nikkolas Pena believes the numbers on WUN’s income disclosure are misrepresentative.

“People go in with the wrong expectations,” Pena said. “A lot of people join and think they will just immediately be making money without putting in any work. It all depends on what you’re willing to put in.”

Some students are also attracted to being able to make their own work schedules – which is especially attractive for students who often have limited time available to work. “Network marketing allows me to be my own boss [and] set my own hours . . .” Pena said in an email.

Network marketing is not without risks, however. Network marketing requires an up-front investment on the part of distributor. If the distributor is unsuccessful in promoting the company, according to a report in USA Today, there is the risk that the distributor won’t be able to earn back their initial investment

Bernard Liscano, FCC business instructor and faculty advisor to the CEO Club, believes that the sales pitches used to attract students to network marketing are misleading.

“I believe it needs to be more clear what it is that the average person makes,” Liscano said.

Students are generally attracted to the ease of entry and the flexible hours, but also need to be aware of the opportunity cost that network marketing entails, Liscano said.

“Does this mean that they are not able to attend classes or study for exams because they are busy with their marketing?”

Even more concerning, the FTC warns, “not all multilevel marketing plans are legitimate.”

The FTC states that if the money you make is primarily from recruiting others to be distributors instead of from selling the product, the company may be a pyramid scheme.

A pyramid scheme is an unsustainable business model where the money earned comes entirely from new recruits paying to become distributors for the company. In  pyramid schemes, according to the FTC, nearly all people involved lose money.

Liscano believes that students entering into a network marketing venture need to have a plan.

“It is incumbent upon the student to establish –  is this a short-term thing for me? Or is it something I want to make a career out of?”

How, Liscano says students should ask themselves, will a network marketing venture help them arrive at their big picture goals?

Liscano said the miniscule chance of success network marketing ventures generally offer make them poor opportunities. “Let me give you an analogy that is relevant to this situation,” Liscano says. “While we’ll see advertisements saying ‘We have a fantastic deal on [a particular car model,]’ what they don’t tell you is that in the microprint it says, ‘We have this deal on one car only.’”

He believes students would be better served by the stability of a job which pays by the hour.

“You will find on occasion a strong success story,” Liscano said, “but that is the exception, rather than the rule.”